- The Washington Times - Thursday, August 11, 2005

NEW YORK (AP) — Former WorldCom finance chief Scott Sullivan, who carried out the largest accounting fraud in U.S. history but insisted he did it under pressure from his boss, was sentenced to five years in prison yesterday by a judge who called him “the architect” of the scheme.

U.S. District Judge Barbara Jones praised Sullivan for pleading guilty last year and helping the government build its case against ex-Chief Executive Officer Bernard Ebbers, who was sentenced to 25 years in prison.

The judge said she was giving Sullivan a break because his wife has diabetes and during her frequent hospitalizations has been unable to care for the couple’s daughter.

Still, “Mr. Sullivan’s offenses were of the highest magnitude,” Judge Jones said. “Mr. Sullivan, I believe, was the architect of the fraud. Mr. Sullivan was the day-to-day manager, if you will, of the scheme.”

Five former WorldCom executives have now been sentenced to prison, their terms totaling more than 32 years, for orchestrating the $11 billion fraud that sank the telecommunications company three summers ago.

Sullivan, 43, has already agreed to sell his $11 million mansion in Boca Raton, Fla. — a lavish Mediterranean-style estate with 10 bedrooms and seven fireplaces — and turn the money over to former WorldCom investors.

Under the settlement, he also forfeited his decimated WorldCom retirement account. His lawyer said yesterday that Sullivan had been left without any assets. Sullivan’s wife will set up a trust fund to care for their daughter.

Sullivan, pleading for leniency before the judge issued her sentence, said he accepted responsibility for his crimes and would “carry the burden of my failing always.”

“I am sorry for the hurt that has been caused by my cowardly actions. I truly am, Your Honor,” he said. “I stand before you today ashamed and embarrassed.”

Sullivan said his wife has been hospitalized in emergencies nine times this year alone, suggesting a prison sentence would be an “extreme burden” on his wife and daughter.

As WorldCom grew from a small Mississippi long-distance reseller into a global communications titan, Sullivan came to be seen by Wall Street as an exceptional chief financial officer and something of a whiz kid.

He was indicted in 2002 shortly after the company went bankrupt, and initially denied wrongdoing. But he pleaded guilty to fraud and conspiracy in 2004 just before he was to go to trial, turning on his former boss.

At Ebbers’ trial earlier this year, Sullivan was the star witness, telling jurors Ebbers repeatedly urged him to “hit the numbers” — a kind of mantra that Sullivan said he interpreted as a command to commit fraud in order to meet Wall Street expectations.

“I told Bernie, ‘This isn’t right,’ ” Sullivan said from the witness stand, describing an October 2000 meeting in which he said he showed Ebbers a plan to improperly create $133 million in revenue. “He just stared at it, and he looked up at me and he said, ‘We have to hit our numbers.’ ”

Sullivan admitted he examined WorldCom’s performance each quarter, compared it to what analysts were expecting, then ordered subordinates to make up the difference.

Three of those subordinates — controller David Myers, accounting director Buford Yates and accounting manager Betty Vinson — all face prison terms, although significantly less than Sullivan’s and Ebbers’.

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